ECB Plans to Increase Bond Purchase to Tackle Recession

Bloombergs recent survey on economists suggested that the European Central Bank(ECB) will expand its bond purchase program in the up-coming months in order to provide more support to the economy.

ECB Chair Christine Lagarde estimated as much as 15% of shrinkage in economy, while most observers expect the plan to be officially launched before this September. The exact time and scale of this plan, however, will depend on how much the government is willing to spend.

Previously, European leaders have approved a€540 billion(equivalence of US$580 billion) program to cushion the immediate shock of coronavirus on economy, but have yet to compose a long term revival plan.

Economists estimated that Europe will launch emergency package worth of €750 billion and further increase spending by €500 billion, which stack up this years total asset purchase to over €1.5 trillion.

EUR/USD daily pivot points: 1.0776---1.0809

S1 1.0759 R1 1.0858

S2 1.0693 R2 1.0891